Essentially everyone is familiar with receiving bills. Every month, like clockwork, millions of consumers and businesses receive bills for goods and services. For convenience, the term "consumer" is used throughout this document to represent both a typical person who consumes goods and services as well as a business that consumes goods and services.
At the end of each billing cycle, a biller generates a bill or statement for each consumer account having a positive or negative account balance, or having transactions that yielded a zero balance. As used herein, a "biller" is any party that originates billing statements for goods or services rendered to the consumer. Examples of billers are utilities, government, merchants, and intermediate billing services such as banks.
The biller also creates remittance information that associates the consumer account with the bill and any payment toward the bill. The remittance information is typically in the form of a detachable stub or coupon that the consumer detaches from the billing statement and returns along with the payment.
The consumer typically pays bills in one sitting, once or twice a month. Until the bill paying time, the consumer collects the bills in one location, a bill "safe-keeping" location. This is a bit inconvenient since the consumer must usually keep many pieces of paper for each bill, including the statement, the remittance stub, the return envelop, and so forth. Additionally, in a family setting, there is often one designated bill payer. If a non-bill payer member handles the bills in an unconventional manner, such as not putting it in the bill "safe-keeping" spot, or not saving the appropriate pieces, or failing to inform the bill payer that the bill arrived, there is significant risk of a missed payment, resulting in unnecessary fees.
The behavior patterns of bill payers vary widely. As an example, here is one common scenario. When the bill paying time arrives, the consumer organizes the bills in some order on the kitchen table. The consumer lists the bills on a paper tablet, including their amount and due date, and begins to mentally analyze when payment should be made. The consumer estimates cash inflow from monthly paycheck(s) or other sources, and estimates the cash outflow resulting from the bills. If the outflow exceeds the inflow, the consumer spends additional time trying to determine how much to pay on each bill, when to pay it, and so forth to avoid incurring a negative balance in their checking account. This exercise is tedious, tiresome, and inefficient.
Once the payment plan is finished, the consumer typically pays the bills by check. Depending upon the analysis, the payment may partially or fully satisfy the amount due in the bill. For each bill, the consumer fills out the payment information on the remittance stub (e.g., amount paid, payment date, and account number), encloses the stub and check in an envelope (often, pre-addressed), and mails it back to the biller using the U.S. postal service.
The conventional paper-based billing system has many drawbacks. There are many headaches associated with collecting bills without misplacing them, organizing the bills, figuring out a payment plan, writing the checks, and so forth. In the end, after all the bills have been paid, the checking account often reflects an ending balance (if Murphy's Law holds) that is lower than the estimated balance derived on the paper tablet.
Unfortunately, the headaches turn to migraines if the consumer also finds that he/she has been mistakenly billed and wants to dispute a bill or reduce the amount paid for the bill. Under present practices, if a consumer wishes to dispute part or the entire bill or remove a transaction item from the bill, the consumer must call the billing company and discuss the matter with a representative. In many cases, the consumer is asked to submit a written letter explaining why the bill is inaccurate. This technique is time consuming, inconvenient and frustrating for the consumer, expensive for the biller, and can induce errors if the partial payment submitted by the consumer is not properly matched up with the appropriate items being paid and those items being challenged. Thank goodness bill payment is limited to once or twice a month.
There is a growing popularity and use of personal finance management (PFM) computer software to assist consumers in managing their finances. Examples of PFM software include "Money" from Microsoft Corporation and "Quicken" from Intuit, Inc. The PFM software enables consumers to electronically track their checkbook and other financial endeavors. PFM users receive the paper bills, enter them into their computers, and manage payment of the bills electronically, rather than on a pad of paper.
It would be beneficial to devise a consumer-based system that handles electronic billing statements transmitted directly from the biller and enables the consumer to manage and pay his/her bills electronically. Unfortunately, most of the PFM software focuses primarily on bill payment, with little emphasis on electronic bill management and essentially no innovation in handling electronically distributed billing statements. Many PFM systems still rely on delivery of paper bills through the U.S. mail.
PFM users are often encouraged to join an additional bill payment service. Examples of electronic bill payment service providers include companies like CheckFree Corporation, Intuit Services Corporation, and VISA Interactive. With this service, the consumer can pay bills without writing paper checks. The consumer sends payment instructions to his/her bill payment service provider by computer (i.e., email), or by telephone using an interactive voice response system. For recurring bills, such as a mortgage, the consumer can also arrange so-called "direct debit" payment systems in which routine payment amounts are automatically debited from the consumers bank account and credited to the biller's bank account on agreed transaction dates.
While the PPM systems help alleviate the problems plaguing the traditional paper-based system, there is room for improvement.
The inventors have devised an electronic bill management and payment system that improves upon existing PFM systems and that is further designed to effectively handle incoming electronic billing statements.